[FoRK] The Corporation...

Owen Byrne owen at permafrost.net
Sun Aug 8 12:17:49 PDT 2004

J.Andrew Rogers wrote:

> On Aug 7, 2004, at 4:37 PM, Owen Byrne wrote:
>> Specifically in the US, its probably the vast difference in wealth 
>> between the top and the bottom - essentially a recreation of the
>> European "nobility" but lacking the constraints on the behaviour of 
>> the nobility that has evolved over thousands of years in Europe.
> Only in Europe, or at least in some of the major countries in Europe 
> (e.g. France) where the major corporate hierarchies, which are in bed 
> with the government far beyond anything we have in the US, are 
> literally the old nobility.
> Obviously you never bothered to actually find out what the churn rate 
> on wealth is in the US.  Multi-generational wealthy families are 
> sufficiently rare that many of the exceptions are well-known.  
> Usually, its pauper-to-king by one individual, and no more than three 
> generations from king-to-pauper for the family.  Often far less than 
> that.  "A fool and his money are soon parted" is as true today as it 
> has always been.
> My family tree has been very wealthy for at least five generations, 
> possibly longer.  But there has never been any inheritance or transfer 
> of wealth within the family; every time someone dies, a charity, 
> non-profit, or some organization gets very lucky.  In fact, there 
> generally aren't any allowances at all ("get a job") and when you turn 
> 18 you are on your own financially, even for college.  And I've known 
> a number of other people who were in families like this, it is not 
> that unusual.  If you are poor, you are probably in this position 
> anyway (except that then you can get financial aid for school).
> To an ill-educated outside observer, it looks like my family is "old 
> wealth" -- this pseudo-nobility you are fixated on.  But every single 
> person built their fortune by bootstrapping from nothing more than a 
> work ethic, intelligence, motivation, and arguably a genetic 
> predisposition for financial success.  I'm the oldest of my 
> generation, and it is already apparent that my generation is producing 
> yet another bumper crop of wealthy or soon to be wealthy people, and 
> most haven't left their 20s yet.  No inheritance required.
> As an aside, I've often suspected that there is a basic truth about 
> the kind of environment that produces financially successful people 
> buried here somewhere.  Even most middle-class parents spoil their 
> children with unnecessary financial support, and I would argue that 
> being genuinely poor during those formative 18-25 years probably 
> creates good habits that serve very well later.
> j. andrew rogers
Thank you for the unintentional compliment - I'm sure the "ill-educated" 
is directed towards me. After a lifetime of being called over-educated 
its rather refreshing. The rest of your drivel sounds like the usual 
American propaganda. As a matter of fact I have looked fairly at this 
particular topic - and its largely mythological, at least for the past 
30 years.

The best way to get rich in the US is to be entrepreneur. Its a heck of 
a lot easier if your daddy's rich so that you can join his law or 
consulting firm
if  your entrepreneurial venture fails. If you look at the richest 100 
or so people in the US, yes many of them are "self-made" but they almost 
invariably are from the upper middle class or higher club. Bill Gates is 
a good example.

"William Henry Gates III made his best decision on October 28, 1955, the 
night he was born. He chose J.W. Maxwell as his great-grandfather. 
Maxwell founded Seattle's National City Bank in 1906. His son, James 
Willard Maxwell was also a banker and established a million-dollar trust 
fund for William (Bill) Henry Gates III."
Remind your parents not to send you to public school. Bill Gates went to 
Lakeside, Seattle's most exclusive prep school where tuition in 1967 was 
$5,000 (Harvard tuition that year was $1760). Typical classmates 
included the McCaw brothers, who sold the cellular phone licenses they 
obtained from the U.S. Government to AT&T for $11.5 billion in 1994. 
When the kids there wanted to use a computer, they got their moms to 
hold a rummage sale and raise $3,000 to buy time on a DEC PDP-10, the 
same machine used by computer science researchers at Stanford and MIT. [1]

Real easy to drop out of HBS and start an entrepreneurial venture when 
you have that to fall back on.

You can go down the list of billionaires and find similar stories. If 
they weren't able to hire people to play up the "self-made" myth - you 
would find that the vast majority - go to the same schools, live in the 
same neighbourhoods, have the same friends.

Warren Buffett - Dad was a senator.
Sam Walton - his father-in-law leant him the money to start his first 
Paul Allen - another Lakeside graduate.
Steve Ballmer - prep school then Harvard College, Dad was a "manager" at 
Ford in Detroit - not conclusive but given the mythologizing associated 
with billionaires I would bet he was probably pretty high up.

Last time I went through the top 100 well over half had inheritance as 
their primary source of wealth. What you describe may have been true 
once upon a time - but not at least since King Ronnie ascended the throne.

So I imagine you had a trust fund to fall back on too. "Ill educated" is 
usually code for - when it comes from the upper class -  "I'm better 
then you." Your own tired argument shows that to be nonsense.  I don't 
even need to really talk about this, the argument has been made in many 
places already.
Fair disclosure - I attended some private schools myself - largely 
because some bureacrat wanted to keep me back after missing 4 months due 
to my parents getting out of the lower classes the only way the lower 
classes can - desparately. The jesuit school I attended was good enough 
to actually let me take entrance exams and let me in based on my 
results. . All I can say - because my family was poor at times - is 
thank God we weren't American. I can think of no other industrialized 
country where it is worse to be poor. 15,000 slaves imported last year. [2]

Frankly my "ill education" is probably 10 times better than yours - just 
because I have seen and met poor people. Whereas you have probably just 
met people playing at being poor.


[1] http://philip.greenspun.com/bg/
[2] http://www.miami.com/mld/miamiherald/news/9102665.htm?1c

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